Gorman-Rupp Reports Record First Quarter 2014 Revenue

MANSFIELD, Ohio--(BUSINESS WIRE)--The Gorman-Rupp Company (NYSE MKT: GRC), a leadinginternational designer, manufacturer and marketer of pumps and pump systems, reports financialresults for the first quarter ended March 31, 2014.

Net sales during the first quarter of 2014 increased 19.0% to a record $110.1 million compared to$92.5 million during the same period in 2013. Domestic sales increased 28.0% or $15.7 million andinternational sales increased 5.3% or $1.9 million. Sales in water end markets increased $12.0million and sales in non-water end markets increased $5.6 million during the first quarter.

The increase in water end market sales was due about equally to increases in shipments of $4.1million in the construction market principally for pumps for rental businesses and for oil and gasdrilling and fracking within North America, $4.1 million in the fire market due to increased domesticcommercial construction spending, and $4.3 million in the municipal market driven by large volumepumps related to wastewater and water supply. Sales increased $5.6 million in the non-watermarkets primarily due to increased shipments for the OEM market related to power generationequipment and pumps for military applications.

Gross profit was a record $27.6 million for the first quarter of 2014, resulting in gross margin of25.0% compared to 23.0% in the same period in 2013. The increase in gross margin was principallydue to increased sales and sales mix changes during the quarter. Operating income was $14.7million, resulting in operating margin of 13.3% in the first quarter of 2014 compared to 8.9% in thesame period in 2013. The gross margin and operating margin for the first quarter of 2013 werereduced by 90 and 150 basis points, respectively, due to a non-cash pension settlement chargewhich did not recur in the first quarter of 2014.

Net income was $10.0 million during the first quarter of 2014 compared to $5.8 million in the firstquarter of 2013 and earnings per share were $0.38 and $0.22 for the respective periods. Earningsper share for the first quarter of 2013 included a reduction of $0.04 due to a non-cash pensionsettlement charge.

The Company's backlog of orders was $171.7 million at March 31, 2014 compared to $182.2 millionat December 31, 2013. Incoming orders grew 19% during the current quarter compared to theprevious quarter primarily reflecting increased activity across our water end markets. The $10.5million decrease in backlog is principally due to record shipments during the current quarter.Approximately $56.1 million of the PCCP project to supply major flood control pumps to a member ofa joint venture construction group for a significant New Orleans flood control project remain in theMarch 31, 2014 backlog total. The pumps for this project are expected to be shipped primarily in thesecond half of 2014 and first half of 2015.

Cash and short-term investments totaled $22.0 million and short-term bank debt was $5.2 million atMarch 31, 2014. Working capital rose 5.4% from December 31, 2013 to a record $135.5 million atMarch 31, 2014 principally due to increased first quarter 2014 net sales. Net capital expendituresfor 2014, consisting principally of machinery and equipment and building improvements, areestimated to be in the range of $12 to $14 million and are expected to be financed through internallygenerated funds.

Jeffrey S. Gorman, President and CEO said, "We are pleased to be off to a strong start in 2014 withrecord quarterly revenue. We are encouraged by the on-going stabilization in key markets theCompany serves and continue to believe 2014 should be a solid year for the Company."

Safe Harbor Statement

In connection with the "safe harbor" provisions of the Private Securities Litigation Reform Act of1995, The Gorman-Rupp Company provides the following cautionary statement: This news releasecontains various forward-looking statements based on assumptions concerning The Gorman-RuppCompany's operations, future results and prospects. These forward-looking statements are based oncurrent expectations about important economic, political, and technological factors, among others,and are subject to risks and uncertainties, which could cause the actual results or events to differmaterially from those set forth in or implied by the forward-looking statements and relatedassumptions. Such factors include, but are not limited to: (1) continuation of the current andprojected future business environment, including interest rates and capital and consumer spending;(2) competitive factors and competitor responses to Gorman-Rupp initiatives; (3) successfuldevelopment and market introductions of anticipated new products; (4) stability of government lawsand regulations, including taxes; (5) stable governments and business conditions in emergingeconomies; (6) successful penetration of emerging economies; (7) unforeseen delays or disruptionsin the New Orleans flood control project; and (8) continuation of the favorable environment to makeacquisitions, domestic and foreign, including regulatory requirements and market values ofcandidates. Except to the extent required by law, we do not undertake and specifically decline anyobligation to review or update any forward-looking statements or to publicly announce the results ofany revisions to any of such statements to reflect future events or developments or otherwise.

David P. Emmens

Corporate Secretary

The Gorman-Rupp Company

Telephone (419) 755-1477

NYSE MKT: GRC

For additional information, contact Wayne L. Knabel, Chief Financial Officer, Telephone (419) 755-1397.

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The Gorman-Rupp Company and Subsidiaries

Condensed Consolidated Statements of Income (Unaudited)

(in thousands of dollars, except per share data)

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Three Months Ended March 31,

2014

2013

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Net sales

$

110,064

$

92,457

Cost of products sold

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82,510

Â

71,233

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Gross profit

27,554

21,224

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Selling, general and administrative expenses

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12,861

Â

12,967

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Operating income

14,693

8,257

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Other income (expense) - net

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139

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(30

)

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Income before income taxes

14,832

8,227

Income taxes

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4,878

Â

2,409

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Net income

$

9,954

$

5,818

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Earnings per share

$

0.38

$

0.22

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The Gorman-Rupp Company and Subsidiaries

Condensed Consolidated Balance Sheets (Unaudited)

(in thousands of dollars)

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March 31,

December 31,

2014

2013

Assets

Cash and cash equivalents

$

22,004

$

31,376

Accounts receivable - net

71,902

59,374

Inventories

88,933

89,946

Deferred income taxes and other current assets

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8,370

Â

8,593

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Total current assets

191,209

189,289

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Property, plant and equipment - net

129,648

131,189

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Other assets

5,749

3,657

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Goodwill and other intangible assets

Â

31,199

Â

31,503

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Total assets

$

357,805

$

355,638

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Liabilities and shareholders' equity

Accounts payable

$

16,961

$

17,882

Short-term debt

5,163

9,000

Accrued liabilities and expenses

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33,558

Â

33,878

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Total current liabilities

55,682

60,760

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Postretirement benefits

18,563

18,393

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Deferred and other income taxes

Â

12,339

Â

12,345

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Total liabilities

86,584

91,498

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Shareholders' equity

Â

271,221

Â

264,140

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Total liabilities and shareholders' equity

$

357,805

$

355,638

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Shares outstanding

26,253,043

26,253,043